While job seekers of the past often turned to the want ads posted in local newspapers, today's job seekers readily rely upon the Internet and a host of career and job websites. LinkedIn is one of most popular and reputable of these job and career sites.
Founded in 2002 as one of the first social networking websites for professionals, in the last 12 years LinkedIn’s membership has grown to encompass some 300 million individuals in more than 200 countries. The company has also taken steps to expand and grow its service and product offerings.
Today, through product offerings like Talent Solutions, employers are able to filter and search the profiles of LinkedIn members and discover job candidates. The company's job reference tool is at the center of a class action employment lawsuit that was recently filed by four plaintiffs.
At issue in the case is whether LinkedIn violated the Fair Credit Reporting Act when it provided potential employers reference information related to a job candidate's former employers. Unbeknownst to a job seeker, a potential employer could then use the information provided to complete a reference check and ultimately make hiring decisions.
Under the terms of the Fair Credit Reporting Act, companies that rely upon credit reports when making determinations related to an individual's employment, insurance coverage or acceptance related to financial offerings must obtain consent prior to or notify the individual about a consumer report.
The definition of what constitutes a consumer reporting agency or company will likely be a factor in this class action lawsuit. According to the Consumer Financial Protection Bureau, a consumer reporting company is defined as one that "collects information and provides reports on consumers that are used to decide whether to provide consumers credit, insurance, or employment, and for other purposes."
While LinkedIn isn't included in the agencies January 2014 List of Consumer Reporting Agencies as a company that provides employment history reports, the outcome of this case could change that.
The plaintiffs in the lawsuit assert LinkedIn should have been required to obtain consent from potential job candidates prior to their employment history being shared. The defendant's failure to obtain consent from or notify job seekers may have resulted in inaccurate information being released to potential employers who then made recruiting and hiring decisions based upon this information.
Source: FastCompany, "LINKEDIN HIT WITH CLASS-ACTION LAWSUIT FOR ITS JOB REFERENCE TOOL," Alice Troung, Oct. 13, 2014
Consumer Financial Protection Bureau, "List of Consumer Reporting Agencies," Jan. 2014